IN THE DARK ON

RENEWABLES Rebutting Deloitte and Climate Reality – Insights for

Investors, Policymakers and the Public

ABSTRACT Deloitte Insights and Climate Reality have recently issued

reports making claims that renewables – especially wind

and solar – are as cheap and as reliable as conventional

coal-fired or natural-gas-fired power.

We demonstrate that these claims are not valid and

show that wind and solar exist almost entirely due to

preferential government programs and subsidies.

Mass deployment of wind and solar can destabilize

power grids. Solutions like batteries, flywheels, and

pumped hydro are exorbitant in cost. Renewables-plus-

storage systems cannot reasonably be scaled up to meet

society’s demand for reliable power.

Large additions of wind and solar do not necessarily

reduce carbon dioxide emissions. In any case, human-

produced CO2 is not a control knob that can fine-tune

Earth’s climate.

Friends of Science Society Nov. 18, 2018

Image licensed from Shutterstock

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Contents

Rebutting Deloitte Insights and Climate Reality ................................................................................................... 2

Solar and the Misleading Levelized Cost of Energy (LCOE) ................................................................................... 3

Wind: A Half Truth is a Whole Lie ......................................................................................................................... 8

Storage is not a Viable Solution .......................................................................................................................... 12

Real-World LCOE Values ..................................................................................................................................... 14

Other Challenges with Integrating Renewables ................................................................................................. 15

The Whole Truth – Not Half ................................................................................................................................ 18

Wind and Solar Don’t Always Reduce CO₂ Emissions ......................................................................................... 19

Geothermal is also not Viable ............................................................................................................................. 20

Why Are We Doing This? .................................................................................................................................... 22

The Effect on Society .......................................................................................................................................... 24

CO2 is not a Control Knob to Fine Tune Climate ................................................................................................. 28

Conclusion ........................................................................................................................................................... 30

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In the Dark on Renewables: Rebutting Deloitte Insights and Climate Reality

Deloitte Insights, an imprint of Deloitte LLC, recently published a report entitled Global Renewable Energy

Trends—solar and wind move from mainstream to preferred.1 Shortly thereafter, Climate Reality issued an e-

book entitled How Renewables Work: A Practical Guide to Wind, Solar and Geothermal.2 According to Deloitte,

wind and solar are now benefitting from three enablers:

The first enabler is that wind and solar are reaching price and performance parity on the grid and at the socket. Second, solar and wind can effectively help balance the grid. Third, new technologies are honing the competitive edge of wind and solar.

As this report shows, these claims are not valid.

The assertion that wind and solar are reaching performance parity on the grid and at the socket ignores the

reality that they require nearly equal amounts of conventional power generation to back them up because the

wind does not always blow and the sun sets every day. Since wind and solar power generation systems are

paired with fossil fuel, nuclear, and/or hydro back-up generation, wind and solar are effectively redundant,

which means consumers effectively have to pay for two sets of generators. And while the costs of wind turbines

and solar panels may have dropped in recent years, successfully integrating those technologies requires

transmission-system upgrades, energy storage systems, and certain technical upgrades that all come at an

additional cost.

Regarding the claim that wind and solar can effectively help balance the grid, it is true that certain technical

advancements can reduce the negative effects that wind and solar have traditionally had on system stability.

However, no amount of technical wizardry will allow wind to contribute to system balancing when the wind is

not blowing, and no amount of wizardry will allow solar to contribute to grid balancing at 3:00 a.m. local time.

The price parity claim, which is based on a value known as the levelized cost of energy (LCOE), is also invalid.

Even if the LCOEs of wind and solar were lower than the LCOEs of conventional generation—a debatable

proposition—that does not translate into lower overall costs for consumers. The problem with the LCOE as a

cost metric is that it ignores all the peripheral costs of forcing wind and solar onto the grid that were just noted.

According to Climate Reality, the transition to 100% renewable energy systems will be helped along by

geothermal energy for heating and cooling. This claim, too, is largely invalid. While geothermal is playing a

role—and will continue to play a role—in the world’s energy systems, it is simply not capable of replacing

traditional heating and cooling systems in all situations or all locations.

The absurdity of the notion that it will now be easy and cheap to convert to 100% renewable energy systems

is highlighted by the following chart, which comes from BP’s Statistical Review of World Energy.3 Renewables

(excluding hydro), shown in dark orange, accounted for just 3.6% of world primary energy consumption in

1 https://www2.deloitte.com/insights/us/en/industry/power-and-utilities/global-renewable-energy-

trends.html?id=us:2sm:3tw:4di4624:5awa:6di:MMDDYY:HANDLE::author&pkid=1005414 2 https://www.climaterealityproject.org/sites/default/files/renewables_ebook_09_2018.pdf 3 https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/downloads.html

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2017. Consequently, renewables advocates are effectively suggesting that we can rebuild the world’s entire

energy system while maintaining the existing one as a backup, and that we can do in a ludicrously short period

while keeping costs low. This is simply not reality.

Solar and the Misleading Levelized Cost of Energy (LCOE)

The Deloitte report claims that solar is at or near price and performance parity with conventional generation.

The claim is not true, and to see why we will compare the overall cost of supplying electricity to a single-family

home in southern Alberta using fossil-fueled generation to the cost of supplying that electricity with solar plus

storage. The supply problem being considered is admittedly highly simplified and the numbers used are purely

fictitious, but since our intent is to illustrate the LCOE and the interpretation challenges associated with it, not

to debate actual costs (which can vary from place to place) or study energy economics in detail, it will be quite

sufficient. We will extend our consideration to wind and large-scale electric systems later.

In simple terms, a generator’s LCOE is the net present value (NPV) of the stream of costs (including initial capital

and financing costs, ongoing operating and maintenance expenses, and fuel costs) divided by the energy

produced over its lifetime.4 The concept seems straightforward enough, but as the United States Energy

Information Administration (EIA) warns:5

4 There is some variation in how LCOE is calculated. For example, the electricity stream (annual kWh) is sometimes discounted. 5 https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf

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Because load must be balanced on a continuous basis, generating units with the capability to vary output to follow demand (dispatchable6 technologies) generally have more value to a system than less flexible units (non-dispatchable technologies), or than units using intermittent resources to operate. The LCOE values for dispatchable and non-dispatchable technologies are listed separately in the tables, because comparing them must be done carefully.

The direct comparison of LCOE across technologies is, therefore, often problematic and can be misleading as a method to assess the economic competitiveness of various generation alternatives because projected utilization rates, the existing resource mix, and capacity values can all vary dramatically across regions where new generation capacity may be needed.

Let’s now turn to our electricity supply problem. The owners of a new house located near Brooks, in

southeastern Alberta, want to stay “off the grid.” The house will use exactly 8106 kilowatt-hours (kWh) of

electricity per year.7 The three supply options are a Model A fossil-fueled generator, a Model B fossil-fueled

generator, and solar photovoltaic (PV) panels. To keep things simple we assume that both the cost of the

generator and the cost of the fuel, if any, will be paid in a lump sum at the end of each year.

The Model A generator costs $20,000 and consumes 8¢ worth of fuel for each kilowatt-hour of electricity

produced. The annual payment is $1420 for the generator plus $648 for fuel, so the NPV of the payment stream

at a 5% discount rate is $29,140. Dividing by total kilowatt-hours produced (202,650 over 25 years) gives an

LCOE for Model A of 14.4¢/kWh. The Model B generator costs more up front ($23,000), but it is more efficient,

using only 4¢ worth of fuel per kilowatt-hour. The annual payment is $1632 plus $324, which gives an NPV of

$27,570 and an LCOE of 13.6¢/kWh. In this simple case we could have dispensed with the NPV calculation and

simply looked at the first-year cost, but in the real world the cash-flow stream would be more complicated and

the NPV calculation would be needed.

Both fossil-fueled generators are dispatchable, which means they can vary their outputs to match the amount

of electricity the home is consuming at any moment in time. Since they are each capable of meeting the home’s

electricity needs on their own, the choice comes down to the LCOE. Model B is the clear winner.

Let’s bring in the PV array. If we take the LCOE to be 10¢/kWh, we can work backwards and calculate an initial

cost of $20,250 (since there is no fuel cost). The array has to be 6 kW to match the annual energy requirement,

as we shall see in a moment, so the initial cost works out to be $3375 per installed kilowatt. Since the PV array

has a much lower LCOE than Model B does, it would seem to be the best choice. However, whereas an LCOE

comparison between Model A and Model B is an apples-to-apples one, an LCOE comparison between Model B

and the solar array is an apples-to-oranges one.

6 “Dispatchable” refers to resources, typically but not exclusively conventional generators, that can increase or decrease their

power injections or withdrawals on demand. Responsibility for dispatch resides with the power-system operator, who will, for example, direct a gas-turbine generator to increase its output as the demand for electricity increases as people wake up in the morning or to address a supply/demand imbalance when another generator trips off line. Some actions are handled automatically by protection and control systems. Some wind and solar facilities can be dispatched down, but they generally cannot be dispatched up because the system operator cannot direct the wind to blow or the sun to shine. While it would be technically possible to withhold some wind capacity to allow for a dispatch up, doing so would defeat the purpose of building wind in the first place.

7 For the purposes of this example, our forecasts are perfect, all systems are perfectly reliable, and all systems have a useful lifetime of 25 years.

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Natural Resources Canada8 provides monthly solar energy potentials for the Brooks area, at latitude 50.57°N,

for a PV array having a peak output of 1 kW. Multiplying by six gives the monthly kilowatt-hours of production

shown in the following graph. The total energy output is 8106 kWh per year, exactly the amount required by

the house. Brooks’ annual potential of 1351 kWh/kW puts it 154th out of 3516 locations in Canada, though that

potential is only 2% below the 1380 kWh/kW available in the Canadian solar hot-spot of Regway on the

Saskatchewan-Montana border.9 Of the 1089 locations in Canada with a solar potential of 1200 kWh/kW/year

or more, 298 are in Alberta and 616 are in the other two prairie provinces. The Canadian average is 1171

kWh/kW/year. Since an array that produces power at a steady rate of 1 kW for an entire year would produce

8760 kWh in a year, the average capacity factor for a solar array in Canada is 1171/8760 = 13%. The capacity

factor is an important number, as we shall discuss presently.

In addition to the solar potential, the above graph shows the monthly electricity use by the house in our

example (the red line).10 Not surprisingly, a PV array that produces the right amount of energy over the whole

year produces too much in the summer and too little in the winter. From October to February there is a total

energy shortfall of 1383 kWh, which means there is a 1383 kWh surplus from March through September.

A common claim related to solar generation is that all we have to do is add some batteries to store electricity

when the sun is shining and give it back when the sun goes down. Since the October to February shortfall is

1383 kWh, the house would have to go into October with 1383 kWh stored in its batteries to get through the

winter.11 But that’s more energy than is stored in 2000 typical 50-ampere-hour automobile batteries, so

battery storage is clearly not a viable option.

What about increasing the capacity of the PV array? Since the largest monthly energy shortfall is in December,

when production is 360 kWh and consumption is 909 kWh, the house would in theory need an array that is just

over 15 kW, about 2½ times larger than the original 6 kW. But that puts the initial cost of PV up by a factor of

8 https://www.nrcan.gc.ca/18366 9 This is for a south-facing panel with tilt angle equal to the location’s latitude minus 15 degrees. This configuration produces

the highest average annual energy of the configurations listed, though it may not produce the highest winter energy. As measured by global insolation in MJ/m2, there is only a small difference between the monthly share of annual energy between the selected configuration and a configuration have two-axis tracking.

10 The residential profile is based on hourly data from 2016 for more than 100 Calgary residential customers, scaled to equal 8106 kWh per year. Individual consumption profiles vary enormously, so the average profile is perfectly plausible for Brooks. Calgary is roughly 150 km WNW of Brooks.

11 This assumes that batteries are perfect, i.e., that every kWh of stored energy can be delivered when needed. On November 8, 2018, a randomly selected solar PV deep-cycle battery that can store 100 ampere-hours, or 1.2 kWh, was advertised on batterystuff.com for a volume price of US$230. The number of batteries required to store 1383 kWh would be 1152 at a total cost of US$265,000.

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2½. Since the amount of energy required each year has not changed, what started out as an LCOE of 10¢/kWh

is now 25¢/kWh, far higher than the LCOE of the Model B generator. But even that is not the final cost of the

PV system, because some battery capacity is still needed to get through the nights.

Read: “Solar Panels on the Prairies – Hope and Disappointment” A true story.12

The following graph shows the hourly output of a 15 kW PV system, along with the hourly electricity consumed

by the house, for the week of December 18-24, 2017.13 Despite having a 15 kW array whose maximum output

is more than seven times the home’s peak electricity demand, the output of that array was seldom above the

house’s consumption level. To get through this week, the house needed to start with 174 kWh (about 300 car

batteries’ worth) of stored energy. So now the true cost of the PV system is 25¢/kWh plus the per-kWh cost of

300 car batteries, compared to 13.6¢/kWh for the fossil-fueled generator.

12 http://blog.friendsofscience.org/2018/05/13/solar-panels-on-the-prairies-hope-and-disappointment/ 13 The graph actually shows the hourly output of the 15 MW Brooks solar facility. Dividing its true output by 1000 gives us one

of the infinite number of possible sets of hourly outputs for a 15-kW array.

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The conclusion of this simple example is clear: even though solar was assumed to have a lower LCOE than

the fossil-fuel options, the solar option is more expensive in total, and it still runs the risk of failing to meet

the home’s electricity needs if the sun is obscured by heavy cloud or the solar panels are covered with snow

for several days in a row.14

Let’s continue with the present example and look at what happens to LCOE when uneconomic choices are

forced on consumers. If (hypothetical) government rules mandate that 50% of the home’s energy must come

from solar, the owner must buy a 3 kW PV array costing 3 × $3375 = $10,125 along with the Model A generator

costing $20,000. The Model A unit is now less expensive than the more efficient Model B unit because there

are fewer kilowatt-hours over which to allocate Model B’s higher initial cost or to reap the benefit of the lower

fuel cost. The LCOE of the Model A generator increases from 14.4 ¢/kWh to 24.3 ¢/kWh, not because of any

change in the actual cost per kilowatt-hour of available energy, but because the forced adoption of uneconomic

solar generation displaces some of the energy that it would have delivered. Moreover, the less efficient fossil-

fueled generator—the one that produces higher CO₂ emissions—is being used. Since the LCOE of the solar

generation is 10 ¢/kWh and it delivers half the electricity used, the homeowners pay an average price per

kilowatt-hour of ½ × 24.3 + ½ × 10 = 17.6 ¢/kWh instead of the 13.6 ¢/kWh they could have paid.

Renewables advocates seize on this artificially rising fossil-fuel LCOE to claim that renewables can become even

more economic relative to conventional generation. For example, the Deloitte reports states on page 5 that,

“As wind and solar capacities grow, many conventional sources will start operating at lower capacity factors,

causing the LCOEs of both existing and new-build projects to increase. The cost of new solar and wind plants

could eventually be not just lower than the cost of new conventional plants, but also lower than the cost of

continuing to run existing plants globally.” This silly ascending-cost-spiral economics paints a very misleading

picture of the true cost of renewable energy and is one of the reasons why the EIA separates dispatchable and

non-dispatchable generation in its LCOE tables, as shown in a later section.

The above example used electricity supply and demand for a single house to keep things simple. Despite the

simplicity, the same factors come into play on large-scale power systems. Relative to low-latitude parts of the

world, high-latitude regions see:

• electricity demand driven as much or more by winter heating than by summer cooling, which means

that peak demand occurs on cold winter evenings when PV output is zero instead of on hot summer

days when PV output is high;

• more seasonal variability in the length of the day, and therefore more seasonal variability in the output

of PV arrays;15

• earlier sunsets in the winter, which adds lighting to the after-sunset peak demand;16 and

• less total solar energy received each year, as shown in the map below.17

14 The level of certainty assumed in this simple example is far greater than exists in the real world, so in the real world a solar-

plus-storage system would have to be even larger and even more expensive. 15 For example, based on data from the US National Renewable Energy Laboratory’s PVWATTS calculator

(https://pvwatts.nrel.gov/pvwatts.php), a PV array with tilt equal to latitude in Los Angeles produces 70% as much energy in the low month of December as it does in the peak month of August. Also according to PVWATTS, a PV array in Brooks produces only 41% of the energy in December that it does in the peak month of July. The PVWATTS number for Brooks is few percent different from the NRCAN values which, given the variations that occur from year to year, is not surprising.

16 This, along with evening activities such as cooking dinner, accounts for the sharp peak in demand in the early evening. 17 https://solargis.com/assets/Uploads/_resampled/ResizedImageWzc1MCw4MThd-1426148540051.png

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As a result, the output of northern PV systems is likely to be lower and less correlated with electricity demand

on both a daily basis and a seasonal basis than their more southerly counterparts.18 Indeed, in every year since

2000 (the earliest year for which we have

data), Alberta’s annual peak electricity

demand occurred between 5:00 p.m. and

6:00 p.m. on a day in either December or

January, after sunset. So, even when the

annual solar potential of a location in Canada

approaches or even exceeds that of more

southerly locations,19 the need for storage or

other forms of backup supply—and

therefore the overall cost of solar—is likely

to be higher.20

Renewable energy advocates point out that

wind energy is often complementary to solar

energy; that is, the wind may be blowing

when the sun isn’t shining and vice versa.

While that is sometimes true, it is not always

true. Let’s turn to a discussion about wind.

Wind: A Half Truth is a Whole Lie21

The late J.A. Halkema of the Netherlands22 was very critical of grid-scale wind projects. He went to great lengths

to explain why. He pointed out that the density of moving air is very low, which means that large facilities are

required to capture wind energy. He also pointed out that wind energy varies with the cube of the wind velocity

(v3). He said:

The term v3 indicates that it is impossible to predict the power that drives the propeller of a wind turbine. For that reason, it is equally impossible to forecast the number of kilowatts that will be produced at any given moment, or the number of kilowatt-hours during a certain period. Likewise, a prediction of the production/capacity factor of a wind turbine is impossible. It will always be

18 The opposite is true in the southern hemisphere, but with the exception of Antarctica, there is very little land south of 40° S

latitude. 19 Locations that are colder (which increases the efficiency of solar panels) and less cloudy can have higher annual solar output

potentials despite being further from the equator. 20 The LCOE for solar generation provided in the US EIA table shown below is based on a capacity factor of 33%. As noted above,

the average solar capacity factor in Canada is 13%. 21 http://skepticva.org/energy.skepticva.org/halkema/halkemas.html#kinwind 22 Master of Science in Electrical Engineering, author, and former board member of Brown Boveri, Nederland.

https://alternativeenergy.procon.org/view.source.php?sourceID=007492

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guesswork. It is clear that the behaviour of the kinetic energy of the wind is the source of all miseries relating to the use of wind turbines. Without any exception.

Halkema noted that there can be excellent applications for wind turbines if operating in capacities where no

reliability or heavy demand is required, as in the old days on most farms across North America, and in ancient

times (grinding cereal grains) and contemporary times in Europe, primarily the Netherlands, where

groundwater or sea water can be pumped from low lying land or dikes.23

Halkema’s points about energy density and variability can be illustrated using the Blackspring Ridge wind

facility in southern Alberta, Canada.24 It consists of 166 wind turbines rated at 1.8 MW each, spread over an

area of 194 km2. In 2017 the facility produced 1014 GWh of energy, or about 5.2 GWh/km2. Using this as a

representative areal energy density for wind, meeting North America’s 2017 primary energy consumption of

2773 Mtoe (32,249,990 GWh)25 would require 31,800 similar wind farms occupying 6.2 million km2, or about

three quarters of the contiguous United States. By comparison, the 860 MW Shepard gas-fired power plant on

the outskirts of Calgary produced 5314 GWh and sits on 0.24 km2 of land, which gives an areal energy density

of about 22,000 GWh/km2, some 4200 times greater than that of Blackspring Ridge.

Regarding variability, the above chart shows Blackspring Ridge’s hourly output for September 2017. The

orange line is the one-week-moving-average, which late in the month drops to less than 10% of the plant’s 300

MW capacity. Since the facility began operations in mid-2014, there were 98 hours in which its output

increased by more than 150 MWh from one hour to the next, as well as 94 hours in which its output dropped

by more than 150 MWh. This is why claims like Blackspring Ridge’s energy “would be sufficient for

approximately 140,000 Alberta households” must be taken with a grain of salt: the wind farm may produce the

23 An intelligent and efficient use—during which there would be no disadvantage if the wind strength varied—include:

• Pumping water out of 'polders' (low-lying areas of land that have been reclaimed from water and are protected by dikes), which is how a large part of Holland was created;

• Driving mills for cereals and other products; • Driving water pumps for the irrigation of agricultural areas; • Charging small batteries at isolated locations for limited local use. For instance, this made it possible to listen to the

BBC news during WWII Who still remembers the BBC call sign? For these applications no heavy and reliable electricity generation would be necessary, and no serious risks would be involved if the turbine failed to produce constant and reliable power. Thus, the purpose of this treatise is certainly not to slate all wind turbine applications, but to expose the fallacy that wind turbines are a blanket solution to the planet's energy problems.

24 https://www.power-technology.com/projects/blackspring-ridge-wind-project-alberta/ 25 Mtoe means “million tons of oil equivalent.” One Mtoe equals 11,630 GWh.

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amount of energy consumed by 140,000 homes, but it could only supply those homes in the way we normally

think of “supply” if the home-owners don’t mind using only the amount of electricity the wind can produce at

any moment and are okay with sudden, dramatic increases or decreases in available power.

Renewables advocates claim that the extraordinary variability of wind and solar generation is being addressed,

even going so far as to state that new technologies, including control systems and batteries, are allowing wind

and solar to help balance power grids in real time.26 While it is true that the very short-term fluctuations can

now be better managed than they could be several years ago, wind and solar can still only help with real-time

balancing when the wind is blowing or the sun is shining. So at 5 a.m. on a blisteringly cold winter morning

somewhere in Canada (and sometimes almost everywhere in Canada), when any storage devices that might

have been charged by yesterday’s limited sunshine have been exhausted, no amount of technological wizardry

will allow PV arrays to keep furnace motors running. And there is a good chance that, when the weather is

dominated by deep cells of Arctic air, the wind won’t be there to help. An example of this situation occurred

in southern Alberta on the evening of December 30, 2017, when the temperature in Calgary was −30 °C.

As shown in the above snapshots from the Alberta Electric System Operator’s (AESO’s) Current Supply and

Demand report,27 the combined output of 20 wind plants was 1 MW and solar output was zero. Out of total

generation of 10,680 MW (in the Total Net Generation [TNG] column), 5054 MW were supplied by coal, 5142

26 No electrical grid of the scale of (say) North America’s Western Interconnection has ever operated exclusively with

renewables, so the jury is still out on that claim. 27 http://ets.aeso.ca/ets_web/ip/Market/Reports/CSDReportServlet MC is “Maximum Capability,” TNG is “Total Net

Generation,” and “DCR” is “Dispatched Contingency Reserve.” Contingency reserve is typically provided by generators that are intentionally producing at less than their maximum capabilities so that they can ramp up at short notice to bring supply and demand back into balance if there is a sudden shortfall in supply, such as when another generator or a transmission line carrying import power trips off. Wind and solar alone (i.e., in the absence of storage) cannot be relied upon to provide contingency reserves.

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MW were supplied by gas, 214 MW were supplied by hydro, 560 MW was supplied over the tie line from British

Columbia to the west, and 269 MW came from other types of generation including biomass.

The next challenge with wind is its inability to reduce the amount of conventional generation needed by the

power system. The annual capacity value (as distinct from the capacity factor) of wind can be calculated as the

difference between the maximum electricity demand and the maximum electricity demand net of wind. For

example, Alberta’s peak demand in 2017 of 8625 MW was served by several types of generation including

wind;28 the maximum demand that was met by generators excluding wind was 8545 MW. Thus, wind reduced

the need for other forms of generation capacity in 2017 by 80 MW or 5.5% of the total installed wind capacity

of 1445 MW. As shown in the following graph, in 2015 wind generation reduced the need for other forms of

capacity by a mere 0.6% of installed wind capacity. Clearly, wind must be fully backstopped by dispatchable

conventional generation.

This crucial point that wind does not reduce the need for dispatchable generation is reinforced by the next

graphs, which shows the sources of electricity in Germany for week 6 in 2018.29 During one hour on February 7

(the one under the red uranium dot), solar output was zero out of an installed capacity of 45 GW and wind was

producing 2.85 GW out of an installed capacity 53 GW; gas provided 15.9 GW, hard coal provided 16.8 GW,

brown coal provided 18.6 GW, and nuclear provided 9.4 GW. With an installed capacity of almost 100 GW,

wind and solar together contributed less than 3 GW to meeting demand in that hour. Again, wind and solar

must be fully back-stopped by conventional generation. Since consumers must pay the capital costs of

conventional generation regardless of how much energy they get from wind and solar, it follows that the entire

capital investment in wind and solar facilities must be paid for solely by the fuel-cost savings on conventional

generation in order for wind and solar to be truly economic. Since this is not occurring, the claim that wind and

solar are nearing price parity with conventional generation is simply wrong.

28 This figure excludes almost 3000 MW of industrial load served by on-site generation, most of which is fueled by natural gas.

If we include the industrial load, peak demand was 11,473 MW and peak demand net of wind was 11,390 MW. This gives a capacity value of 83 MW instead of 80 MW.

29 https://www.energy-charts.de/power.htm?source=all-sources&year=2018&week=6

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Another argument from renewables proponents is that we can link regions together so that when little

renewable energy is available in one region it can be imported from another. But imagine that Regions A and

B are served exclusively by wind, solar, and storage. If a situation like those just described for Alberta and

Germany arises in Region A and persists beyond the time when its storage runs out, then Region B would be

expected to supply both its own demand and that of Region A. Thus, as a first-order approximation, both

regions have to build twice as much renewable generation as they individually need, which is already more

than twice their own peak demands because of the low capacity factors of renewables. The level of renewables

that each region would have to carry would be modified by the demand diversity that would likely exist (that

is, both systems may not reach their peak demands at the same time), but combining the first-order estimate

with the need to carry a huge level of renewable capacity to supply one’s own region suggests that a 100%

renewable electricity system is not in the cards—at least not at any rational cost—any time soon.

The concept of interconnecting regions depends on the claim that “the wind is always blowing somewhere.” It

turns out, however, that regionally this is simply not true. Euan Mearns and his contributors did a detailed

study of wind output over most of Europe and found there were many periods where there were regional lulls

with ‘no wind nowhere.’30 Even if multi-billion-dollar transmission lines had connected regional power grids,

there would have been no reliable wind power.

Storage is not a Viable Solution

Because the wind does not blow and the sun does not shine all the time, a solution to the variability and

unpredictability of renewable generation is essential if they are to become dominant sources of electricity.

However, energy storage systems are still a long way from adequate or economic.

It was noted above that a generator’s capacity factor, which is the ratio of the amount of energy it produces in

a given period to the amount of energy it could produce if its output was at 100% of capacity for the entire

period, is an important number. A critical consideration for storage is that capacity factors are averages. In the

Brooks solar example, the annual capacity factor of the PV array was 15%. Since this is an average across many

Decembers, actual capacity factors for the month can be much lower. And since there is no guarantee that the

sun will shine the same amount every day in December, even within that month there will be periods of days

30 http://euanmearns.com/wind-blowing-nowhere/

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or perhaps weeks in which the capacity factor is lower still. A similar problem is faced by wind generation: while

the annual capacity factor of Alberta’s existing wind fleet is about 35%, it varies from almost 50% in January to

20% in August. The lowest monthly capacity factor since January 2008 was 15%, while the highest was 66%.

Extreme values are important because engineers design electric power systems for extremes, not averages. As

such, storage volumes measured in hours or even days are simply not adequate for 100% renewable energy

systems.

Energy commentator Roger Andrews,31 writing on Euan Mearns’ “Energy Matters” blog, noted in “The Holy

Grail of Battery Storage” in 2016 that:

It is found that installing enough battery storage to convert intermittent wind/solar generation into long-term baseload generation increases total capital costs generally by factors of three or more for wind and by factors of ten or more for solar, even at $100/kWh. Clearly the Holy Grail of energy policy is still a long way off.

First a simple calculation. $100/kWh = $100,000/MWh = $100 million/GWh = $100 billion/TWh. If everyone is happy with this, we can proceed. (Note that all the costs listed in this post are in US dollars unless otherwise specified).32

It’s probably not an exaggeration to say that the amount of energy storage capacity needed to support a 100% renewable world exceeds installed energy storage capacity by a factor of many thousands. Another way of looking at it is that installed world battery + CAES [compressed air energy storage] + flywheel + thermal + other storage capacity amounts to only about 12 GWh, enough to fill global electricity demand for all of fifteen seconds. Total global storage capacity with pumped hydro added works out to only about 500 GWh, enough to fill global electricity demand for all of ten minutes.33

Pumped hydro is frequently touted as a solution to the variability of wind, but the scale,34 environmental

impact, and cost are often ignored. This US example is telling.35

The United States (U.S.) has over 30 PSH facilities with a combined capacity of 22 gigawatts. U.S. facilities generate around 23 000 gigawatt hours (GWh) per year, and consume 29 000 GWh to operate their pumps. Despite this net loss of energy, the grid reliability provided by PSH facilities and the ability to generate when demand is strong is highly beneficial and will become increasingly important as Canada and the U.S. integrate more renewable power into their grids. (underlining added)

In other words, pumped storage hydro is a net energy sink. A further issue with pumped hydro is that most of

the world’s potential reservoirs have the capacity for only a few hours of power generation from the stored

water. As Euan Mearns has pointed out, real battery or pumped storage must ultimately address a week or

two of potential loss of wind/sun to be of any real benefit.36,37 A project of this scale has been discussed for

the Great Lakes, but it is fraught with many environmental and cost-benefit questions.38

31 http://euanmearns.com/about-roger-andrews/ 32 http://euanmearns.com/the-holy-grail-of-battery-storage/ 33 http://euanmearns.com/is-large-scale-energy-storage-dead/ 34 http://euanmearns.com/the-bingham-canyon-pumped-hydro-project-by-far-the-worlds-largest-but-still-much-too-small/ 35 https://www.neb-one.gc.ca/nrg/ntgrtd/mrkt/snpsht/2016/10-03pmpdstrghdr-eng.html 36 http://euanmearns.com/is-large-scale-energy-storage-dead/ 37 http://euanmearns.com/the-holy-grail-of-battery-storage/ 38 http://euanmearns.com/the-pumped-hydro-storage-potential-of-the-great-lakes/

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Real-World LCOE Values

It should be clear from the above discussion that wind and solar are not at performance parity with

conventional generation. What about price parity?

The US Energy Information Administration provides the following table of LCOEs for new generation entering

service in 2022.39 The LCOE of solar PV is $59.1/MWh (5.91 ¢/kWh) before any tax credits, compared to

$48.1/MWh for advanced combined-cycle generation. The tax credit does not reduce the cost of the system,

it just means taxpayers are covering part of the true cost. The LCOE of onshore wind is $48.0/MWh, which

makes it marginally less expensive than advanced combined-cycle generation, but the wind LCOE does not

include the storage facilities and backup generation required. Neither solar generation nor wind generation

can provide electricity to consumers at a lower overall cost than advanced, combined-cycle fossil-fueled

generators, and representations to the contrary are wrong.

Abbreviations: CCS-Carbon Capture and Storage; CC-Combined Cycle (gas); CT-Combustion Turbine; PV-Photo

Voltaic

The capacity-weighted average is the average levelized cost per technology, weighted by the new capacity coming online in each

region. The capacity additions for each region are based on additions in 2020–2022. Technologies for which capacity additions

are not expected do not have a capacity-weighted average and are marked as NB or not built.

39 https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf

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Other Challenges with Integrating Renewables

The LCOE is not a reliable indicator of the cost of integrating renewable generation into the world’s electric

power systems because it ignores the cost of the backup generation, the additional transmission, and the

storage required by renewables. Those costs, which are driven by the inherent intermittency of wind and solar,

are considerable. Yet they are not the only costs. As described in an Allianz report that discusses the drawbacks

of renewable energy:40

While renewable energy is on the rise in many countries, a major drawback is the ‘volatility’ of supply. This leads to several challenges. The unsteady production of energy, especially from wind or solar power, strains the stability of the network. Further, if wind turbines need to be stopped for safety reasons in extreme weather conditions, this can cause power gaps equal to the loss of two nuclear power plants within just one hour. In such cases, conventional reserve power plants would need to step in instantly. Last but not least, renewable energy has to be transmitted from sparsely populated areas to the metropolitan centers of demand.

The issue of volatility of supply was recently at the forefront in Australia. Following a major blackout event that

left 850,000 customers in South Australia without power, the Australian Energy Market Operator issued a

report that states:

On Wednesday 28 September 2016, tornadoes with wind speeds in the range of 190–260 km/h occurred in areas of South Australia [SA]. Two tornadoes almost simultaneously damaged a single circuit 275 kilovolt (kV) transmission line and a double circuit 275 kV transmission line, some 170 km apart. The damage to these three transmission lines caused them to trip, and a sequence of faults in quick succession resulted in six voltage dips on the SA grid over a two-minute period at around 4.16 pm.41

A contributing factor in the blackout was a rapid reduction in wind generation of 456 MW over a period of less

than seven seconds as the wind plants’ protection features activated. Less than one second after the reduction

in output of the last wind generator, an import transmission line tripped, “islanding” the South Australia power

system. While these events cannot be blamed on the wind generators, they highlight the inappropriateness of

suggesting that, because the wind is blowing, or the sun is shining “somewhere,” we can build 100% renewable

power grids that rely on massive transmission interconnections for when the wind isn’t blowing and the sun

isn’t shining “here.” It is also noteworthy that the Australian Energy Market Operator has recommended a

number of technical changes that are related to the characteristics of wind generators (such as increasing

system inertia42 and increasing the strength of the transmission system to allow wind facilities to ride through

disturbances), all of which come at a cost.

40 https://www.agcs.allianz.com/insights/expert-risk-articles/energy-risks/ 41 https://www.aemo.com.au/-

/media/Files/Electricity/NEM/Market_Notices_and_Events/Power_System_Incident_Reports/2017/Integrated-Final-Report-SA-Black-System-28-September-2016.pdf

42 When a bicycle is upside-down, and the pedals are turned, the rear wheel will spin long after one stops pedaling because the spinning wheel has inertia which resists the stopping forces from friction and applying the brakes. In a power system, a temporary excess of demand over supply, such as occurs when a generator trips off line, is equivalent to applying the brakes to generators. The large inertia of typical fossil-fueled generators prevents them from slowing down so quickly that small imbalances become big ones very quickly. Wind generators themselves have no inertia (they are of a different type than fossil-fueled generators), though there is some inertia in the rotating blades. Solar PV panels have no rotating parts and therefore no mechanical inertia.

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Another problem with integrating (typically subsidized) renewables is that they create severe distortions in

energy markets. Renewables advocates claim that wind and solar generators bring down power prices for

consumers because they burn no fuel and can therefore offer energy into electricity markets at lower prices.

While the price-lowering effect is real, it does not translate into a benefit for consumers for the following

reasons:

• The wind and solar generators probably receive side payments, such as market-price top-ups or

payments for renewable energy certificates, that consumers and/or taxpayers ultimately have to pay.

The fact that these payments may not show up in the energy price causes additional economic

distortions and unfairness as the total cost of electricity is not properly apportioned to electricity

consumers and non-renewable generators are forced to compete on an unlevel playing field.

• As discussed above, the conventional generators that suffer from lower prices in hours when the wind

is blowing or the sun is shining are still needed. For those generators to recover enough money to stay

in business, either prices have to rise dramatically in hours when the wind isn’t blowing and the sun

isn’t shining (leading to extremely volatile prices) or the conventional generators need to receive their

own side-payments. Such a side payment—called a capacity payment—is being implemented in

Alberta right now as the province redesigns its electricity market in preparation for bringing on massive

quantities of intermittent renewable generation by 2030.

• As all-in electricity costs rise, costs rise for virtually all goods and services and businesses become less

competitive compared to those in jurisdictions that do not have rules imposing higher electricity costs.

The economy in general suffers.

• In some markets, an influx of renewables can lead to negative electricity prices. Certain generators,

either because of their technical characteristics or because they would lose revenues by not

generating, may be willing to pay to be allowed to run. What is particularly egregious about this state

of affairs is that consumers in one jurisdiction can end up paying consumers in an adjacent jurisdiction

to take their power. According to a 2015 report by Ontario’s Auditor General,43 between 2006 and

2014 there were almost 2000 hours in which the hourly Ontario electricity price was negative, and

Ontario paid exporters a total of $32.6 million to take its power.

Denmark faces a similar challenge to Ontario’s. It is a country often touted as a leader in renewable energy.

Geographically, it is a tiny place with no spot more than 58 km from the sea, but Denmark has built vast offshore

wind resources. Nonetheless, seven conventional power plants backstop the wind power. In addition,

Denmark’s power grid is connected to Sweden (nuclear) and Norway (hydro). When there is an oversupply of

wind, Denmark can “spill” the excess wind power to either of these countries, which can absorb the additional

power by modifying the output of their nuclear or hydro facilities. As the World Nuclear Association notes,

wind is heavily subsidized in Denmark, so when excess wind power is exported, so are the subsidies.44 In overall

terms, since the wind is typically exported to low-CO₂ Sweden and Norway, there is no net reduction in global

CO₂ emissions.

43 https://www.macleans.ca/economy/the-hard-truths-behind-ontarios-pricey-electrical-system/ 44 http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/denmark.aspx

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Texas also faces challenges. It is often cited as an example of the successful integration of wind, perhaps

because in 2013 it was ranked number one in the United States for tax subsidies.45 The US EIA reports that

“Texas leads the nation in wind-powered generation capacity with more than 21,450 megawatts; since 2014,

Texas wind turbines have produced more electricity than both of the state's two nuclear power plants.”46 But

what has this done for Texas? According to the Texas Tribune: 47

It’s 2018, and the days of warm, evening sun setting on scenic Texas plains are gone for some rural areas like Comanche County. Folks accustomed to unencumbered views will have to look elsewhere. Now, those views are pierced by the sharp teeth of a wind turbine. Summer breezes have transformed into the cyclical swooshing—and occasionally loud creaking—of nearby machinery.

Yet the summer heat remains, reminding us that Texas is facing a tight energy supply—with less reliable energy sources. Three coal plants shut down this year, pulling reserves below the desired target level to meet the energy demands of scorching August afternoons. Many things led to the closures, but the profitability of coal plants in the face of billions of dollars of subsidies for renewable energy—particularly wind—is certainly among the most powerful.

Wind developers are the beneficiaries of disproportionate levels and types of government aid. At the federal level, they receive a production tax credit, which costs taxpayers over $5 billion per year. On top of that, Texas stepped in, providing billions of dollars of additional state and local subsidies.

Yet Texas still runs on natural gas and coal, as the following chart shows.

▪

Unfortunately, Canada is not immune from burdening taxpayers with renewable energy subsidies. Robert

Lyman, Ottawa energy policy consultant, former public servant and diplomat, describes the complex web of

financial aid and other direct and indirect support that Canadian governments uniquely provide to the suppliers

and users of solar and wind energy in Canada.48

45 https://www.texaspolicy.com/texas-ranks-1-for-federal-wind-subsidies-2/ 46 https://www.eia.gov/state/?sid=TX#tabs-4 47 https://www.tribtalk.org/2018/08/10/renewable-energy-subsidies-are-wrong-for-texas/ 48 http://blog.friendsofscience.org/2017/11/05/subsidies-to-solar-and-wind-energy-in-canada-an-inventory/

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The Whole Truth – Not Half

As noted above, J. A. Halkema said a half truth is a whole lie. LCOE only tells half the story. As we have been

discussing, certain fundamental factors limit the ability to move the world’s electricity systems to 100%

renewables. Statements to the effect that wind and solar are now “preferred” and that their LCOEs are lower

than the LCOEs of conventional generation are, at best, highly misleading. The real enablers of wind and solar

are government policies, subsidies, and the mistaken belief that CO₂ is a pollutant that causes global warming,

as the following quote from a 2007 IMPAX Environmental Markets placement document illustrates:

Also in Europe, following the Renewables Directive, which stipulates that twelve per cent of gross internal energy in the European Union should, by 2010, come from renewable sources, larger markets for clean power have developed across the region. Meanwhile, despite resistance, there is a broad international consensus on policies to tackle global warming.49

The Directors believe, based on advice from the Manager, that the key drivers of the Environmental Markets, being market liberalisation, tightening environmental policy and falling costs of new technology, continue to generate attractive opportunities. In the energy sector, these drivers have been reinforced by rising energy prices, concerns over energy security, blackouts and global power quality issues as well as increased government commitment to reducing carbon dioxide emissions. For example, this year there has been a landmark ruling by the US Supreme Court that carbon dioxide is a pollutant which the government has a legal duty to mitigate while, in Europe, the European Commission has proposed new targets for renewables of 20% by 2020.50

For its part, the Deloitte report, that is a subject of discussion here, claims that “…consumers are seeking the

most reliable, affordable and environmentally responsible energy sources.” It goes on to claim that Smart Cities

are instituting 100% renewables and that “Most countries and regions are at renewable penetration levels that

require minimal adjustments to the grid.” But this claim is deceptive. If consumers were aware of the actual

cost of wind and solar (as opposed to the misleading LCOE), it is unlikely that they would see wind and solar as

reliable or affordable. Likewise, if they were aware that wind and solar devices require wasteful quantities of

fossil fuels in their manufacture, such that their total return on energy invested is very low (see below), they

would likely not see them as “preferred.” And if investors understood that there may be long-term liabilities

for the fact that wind and solar devices are made from bonded materials that cannot be easily or cost-

effectively recycled at this time, or that governments are almost unilaterally giving wind/solar companies a

pass on environmental concerns regarding reclamation, recycling and sustainability, it is unlikely they would

see renewables as “responsible energy sources.”

Regarding the claim that “renewable penetration levels require minimal adjustments to the grid,” there is

enough flexibility on many existing power grids in the western world to manage the ebb and flow of reasonable

amounts of wind and solar with the whims of Mother Nature. But Deloitte and Climate Reality are advocating

for a dramatic increase in wind and solar on the grid; Climate Reality advocates for 100% renewables. As we

saw in the foregoing discussion of LCOE, that is not a reasonable economic choice.

49 https://www.impaxam.com/sites/default/files/PROSPECTUS%202007.pdf pg. 22 50 https://www.impaxam.com/sites/default/files/PROSPECTUS%202007.pdf pg. 24

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Wind and Solar Don’t Always Reduce CO₂ Emissions

Renewable wind and solar are ostensibly meant to decrease reliance on fossil fuels and reduce carbon dioxide

emissions. Leaving aside the question of whether this is a useful objective, it is often the case that additions of

wind and solar don’t accomplish either objective. There are several reasons.

• As we have seen, wind and solar are highly variable on timescales of minutes, hours, months, and years.

In the absence of viable storage options, highly flexible generating units such as simple-cycle gas turbines

(SCGTs) are needed to “follow” the frequent ups and downs. This flexibility comes at a price of lower

fuel efficiency, and therefore higher emissions, than less flexible plants. As the amount of wind grows,

so does the magnitude of the potential short-term changes in generation and the need for backstop

generation to be available. Environmentalist Robert Kennedy acknowledged this fact in 2010 when he

said, “For all of these big utility scale power plants, whether it’s wind or solar, everybody is looking at

gas as the supplementary fuel. The plants that we’re building, the wind plants and the solar plants are

gas plants.” 51

• Renewables are typically granted priority when it comes to dispatch, i.e., they are the first to be selected

from among the generators that could be called to run. When the volume of wind and solar gets large

enough, baseload plants—which were designed to run essentially full out in all hours—have to be scaled

back. Not only does this put additional wear and tear on these plants, but the cycling reduces fuel

efficiency, again leading to higher CO₂ emissions.

• If wind and solar displace nuclear power, there is no reduction in CO₂ at all. The Ontario Society of

Professional Engineers notes that adding more wind and solar to their power grid, which largely relies

on nuclear and hydro, will increase CO₂ emissions due to the requirement for natural gas generators to

ramp up and down (nuclear being too inflexible).52

In Germany, the “poster child” of renewable energy, the installed capacity of wind increased from 22 GW to

60 GW and the installed capacity of solar increased from 4 to 49 GW between 2007 and 2016.53 Yet emissions

from that country’s coal-fired power plants only decreased from 282 to 240 million tonnes. And coal does not

appear to be going away any time soon: the BBC recently reported that China has 259 GW of new coal-fired

generation capacity under development,54 and new High Efficiency Low Emissions (HELE) and Ultra HELE coal-

fired power plants are being built in Japan.55

51 https://atomicinsights.com/robert-f-kennedy-jr-tells-the-colorado-oil-and-gas-association-that-wind-and-solar-plants-are-

gas-plants/ 52 http://www.kingstonfieldnaturalists.org/wind/2015_Presentation_Elec_Dilem.pdf Slide 15 53 All data from the Fraunhofer Institute for Solar Energy Systems at https://www.energy-charts.de. 54 https://www.bbc.com/news/science-environment-45640706. The article points out that this is the same capacity as the

entire US coal fleet. 55 https://www.sciencemag.org/news/2018/05/bucking-global-trends-japan-again-embraces-coal-power

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Geothermal is also not Viable

It is not only wind and solar that are touted by renewables advocates. Climate Reality makes a push for

geothermal, discussing it as if it is a given that deep within the earth there is heat from magma and that it can

be tapped. The truth is much more complex.

In certain places, there is ideal access to geothermal resources. As shown on the above map,56 these are

typically regions where tectonic plates come together or where some form of geological structure allows

magma to come near enough to the surface of Earth’s crust that people can actively or passively tap into the

heat. Of the countries today that claim to be running on 100% renewables, most have a large component of

geothermal energy in the mix. But the opportunities for successful geothermal are limited because of these

geological factors.

Geothermal can be developed in two forms, one of which is a Ground Source Heat Pump (GSHP). In a GSHP

system, relatively shallow bore holes are drilled, allowing heat to be pumped from a building into the ground

in summer and from the ground into the building in winter. GSHP systems are only suitable for locations where

the weather is not subject to large and frequent fluctuations because they are not rapid-response systems.57

Likewise, a considerable amount of electrical energy must be available (and affordable) to power the pumps.

High power prices sometimes defeats the intended purpose.

Geothermal for energy generation uses a system in which pipes are set deep into the earth; cold water is

pumped down which then turns into steam as it hits the super-heated rock deep in the ground. That steam

drives above-ground turbines to generate electricity. California successfully uses geothermal. However, even

though the US is the world’s largest generator of geothermal energy, it is still a tiny portion of the country’s

56 http://euanmearns.com/geothermal-energy-in-perspective/ 57 Over the last 130 years in Calgary, there were 315 months in which the temperature varied by more than 25°C (45 °F) in a

single day. In 33 of those months the single-day variation exceeded 30 °C (54 °F). Over that same period there were 341 months in which the monthly temperature range exceeded 40 °C and 30 months in which it exceeded 50 °C.

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energy generation because of geology and many complications in finding the right location. Worldwide,

geothermal supplied less than one tenth of one percent of total energy demand (as shown in the table below).

Notably, in some areas, H2S (hydrogen sulfide) gas can be released from within the earth; it is highly toxic at

very small concentrations.

Friends of Science Society has issued a report on Geothermal for Alberta which gives an overview of global

issues related to geothermal: “Geothermal for Alberta? A Case for Caution.”58

58 https://friendsofscience.org/assets/documents/Geothermal_Alberta_A_Cause_for_Caution.pdf

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Why Are We Doing This?

All this cost-benefit analysis and debunking of the claims of Deloitte and Climate Reality might lead you to ask,

“So why are we doing this? Why build wind and solar at all?”

In some remote locations, solar can be useful where intermittency is not a problem or where there are simply

no other viable options. Wind, in suitable locations, can complement the grid or provide useful abatement of

diesel—as in the El Hierro experiment.59 Also, some people are honestly convinced that human-produced CO₂

will cause catastrophic changes in Earth’s climate. (While Friends of Science and many reputable scientists

dispute the “catastrophic” view, the motives of those people at least appear to be altruistic.) In these cases,

the appeal of wind and solar is obvious—albeit sometimes misguided, as we have shown. However, many wind

and solar advocates—including influential billionaire-funded environmental groups—are pushing for 100%

renewable energy systems. Unfortunately, they have been operating on faulty climate change and renewable

energy premises for over a decade.60

In 2006, several of the country’s wealthiest foundations hired a consulting firm to comprehensively survey the available scientific literature and to consult more than 150 leading climate change and energy experts. The result of this intensive undertaking was the 2007 report “Design to Win: Philanthropy’s Role in the Fight Against Global Warming.”

Leading the report was the recommendation that “tempering climate change” required a strong cap and trade policy in the U.S. and the European Union, and a binding international agreement on greenhouse gas emissions. The report predicted that passage of cap and trade legislation would “prompt a sea change that washes over the entire global economy.” The report included little to no discussion of the role of government in directly sponsoring the creation of new energy technologies. The report was additionally notable for the absence of any meaningful discussion of social, political or technological barriers. Instead, the authors offered a decidedly optimistic outlook: “The good news is that we already have the technology and know-how to achieve these carbon reductions—often at a cost savings.” (underlining added)

Given the discussion above, it is clear that we do not have the technology and know-how to achieve carbon

reductions at a cost savings. If we did, billionaire funding, environmental organizations’ advocacy (including

illegal anti-pipeline antics), subsidies, carbon-dioxide taxes, and special government programs would all be

unnecessary: consumers would simply “vote” for wind and solar with their wallets.

CDP Worldwide61 and UNPRI,62 both influential investment organizations whose signatories hold some $100

trillion in assets under management, are premised on the notion that there is an imminent climate crisis and

only by investing in “low-carbon” technologies like wind and solar can we save the planet. Notably, UNPRI’s

main consultant on ESG (Environment, Social and Governance) issues and “fiduciary duties” is Al Gore.63 A

related body called the Task Force on Climate-Related Disclosures is chaired by Michael Bloomberg.64 In 2014,

59 http://euanmearns.com/el-hierro-first-quarter-2018-performance-update/ 60 http://climateshiftproject.org/nisbet-m-c-2014-engaging-in-science-policy-controversies-insights-from-the-u-s-debate-over-

climate-change-handbook-of-the-public-communication-of-science-and-technology-2nd-edition-london-r/ 61 https://www.cdp.net/en 62 https://www.unpri.org/ 63 https://www.unpri.org/sustainable-markets/sustainable-financial-system/fiduciary-duty 64 https://www.fsb-tcfd.org/

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many of the UNPRI signatories also signed the “Montreal pledge,” which encouraged investors to become

activists with “climate laggards” and “recalcitrant” corporations and governments, especially in countries like

Australia, Canada and the United States (see the following excerpt from UNPRI’s 2016 Annual Report). For its

part, ClimateWorks has funded hundreds of environmental groups to campaign for wind and solar. People who

are truly interested in doing the right things for the environment have been misled into thinking that this

demand is a grassroots movement and that wind and solar are both cleaner and cheaper than the conventional

alternatives.

According to Matthew Nisbet’s research65 and the ClimateWorks Wikileaks “Design to Win” case study,66

Bloomberg is a renewables investor and a party to ClimateWorks, and he and other billionaires have spent

millions demarketing coal. When all costs are included, coal is a cheaper form of generation than wind, which

is why campaigns like “Beyond Coal” and #poweringpastcoal are necessary. Consumers would not knowingly

choose a less reliable yet more expensive form of power generation like wind or solar unless they truly believed

that coal is dangerous to them or the planet—which is the idea the demarketing campaigns promote. Modern

supercritical coal plants are a far cry from early ones.67 But carbon taxes make coal operations unprofitable.

All of this shows that there are very influential parties promoting the notion that carbon dioxide—an odorless,

colorless gas that humans breathe out and that is essential for all life on Earth—presents an imminent risk to

health and the future of the planet, and that CO₂ taxes and subsidies are the solution. It may seem

counterintuitive that investors would support more expensive and less reliable generation technologies, but

subsidies and long-term taxpayer-funded contracts can guarantee healthy returns. Additional financial benefits

are likely to accrue to those who invest in related projects like multi-billion-dollar wind-integration

transmission lines and who can play in carbon (dioxide) markets—one example being the $1.2 billion that the

World Bank and a private investment fund generated in 23 minutes in 2007 by trading Certified Emissions

Reduction credits via the UN Clean Device Mechanism on emissions from a plant in China. There are no other

investments we know of that can provide the level and stability of returns that some of these investments do.

What about saving the planet? The production of wind turbines and solar panels has largely moved to

developing nations where there are few environmental regulations, no particular labour codes, no special

65 https://onlinelibrary.wiley.com/doi/full/10.1002/wcc.524 66 ClimateWorks Foundation - WikiLeaks https://wikileaks.org/podesta-emails/fileid/57594/16165 67 https://www.power-technology.com/features/featurelean-and-clean-why-modern-coal-fired-power-plants-are-better-by-design-4892873/

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hazardous materials gear for workers, no emissions management and no reclamation requirements. How can

anyone call this ‘green’ or ‘clean?’

Effluent of Rare Earth Mineral extraction for Wind Turbines: Villagers Su Bairen, 69, and Yan Man Jia Hong, 74,

stand on the edge of the six-mile-wide toxic lake in Baotou, China that has devastated their farmland and

ruined the health of the people in their community. Daily Mail.68

The Effect on Society

Despite strong evidence to the contrary, such as that reported above, Deloitte, Climate Reality, and other

commentators promote the idea that renewables can economically replace all or most fossil fuel use.69

Unfortunately, this fallacy is having—and unless it is stopped will continue to have—seriously negative effects

on consumers. Dr. Benny Peiser of the Global Warming Policy Foundation (GWPF) explained the energy

quagmire in his 2013 testimony to the US Senate regarding the situation in Europe:

The EU's unilateral climate policy is absurd: first consumers are forced to pay ever increasing subsidies for costly wind and solar energy; secondly they are asked to subsidise nuclear energy too; then, thirdly, they are forced to pay increasingly uneconomic coal and gas plants to back up power needed by intermittent wind and solar energy; fourthly, consumers are additionally hit by multi-billion subsidies that become necessary to upgrade the national grids; fifthly, the cost of power is made even more expensive by adding a unilateral Emissions Trading Scheme. Finally, because Europe has created such a foolish scheme that is crippling its heavy industries, consumers are forced to pay even more billions in subsidising almost the entire manufacturing sector.70

Additional commentary on the societal impacts of current renewable energy policies was provided by Professor

Michael J. Kelly of Cambridge University. He had the following to say about energy return on investment (EROI),

68 https://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-cost-Britains-clean-green-wind-power-

experiment-Pollution-disastrous-scale.html 69 https://www.fiduciaryinvestors.com/wp-content/uploads/sites/61/2018/09/A-farewell-to-fossil-fuels.pdf 70 https://www.thegwpf.com/content/uploads/2014/12/Peiser-Senate-Testimony-2.pdf

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which is the ratio of the useful energy produced by a particular power plant to the energy needed to build,

operate, maintain, and decommission it.71

To get a society that can feed itself and provide a basic educational system we need an EROI of our base-load fuel to be in excess of 5, and for a society with international travel and high culture we need EROI greater than 10. The new renewable energies do not reach this last level when the extra energy costs of overcoming intermittency are added in. In energy terms the current generation of renewable energy technologies alone will not enable a civilized modern society to continue!

Abbreviations: Solar Photovoltaic panels (PV); Concentrating Solar Power Plant (CSP); Combined Cycle Gas Turbine (CCGT)

With respect to consumer prices the experience in Germany is highly informative. The first chart below shows

the composition of power prices for German households using 3500 kWh per year in 2017 and 2018.72 (This is

about half the quantity of electricity that an average Calgary household uses.) The renewables surcharge is

6.79 Euro cents/kWh, which is more than the 6.18 cents/kWh cost of the energy itself. As shown in the second

chart, the energy component of the bill in 2006 was 4.92 cents/kWh, while the renewables surcharge was 0.88

cents/kWh. Since 2006, the energy charge has risen by 25% and the renewables surcharge has risen by 771%.

Sadly, each year between 2011 and 2015, electricity providers cut off power to at least 300,000 German

families who could no longer afford to pay their bills.73 And in Britain, a million families face a heat-or-eat

choice in the winter.74,75 It would, of course, be irresponsible to blame renewable energy alone for a family’s

need to choose between heating and eating; however, it is even more irresponsible for billionaires and green-

71 https://www.cambridge.org/core/journals/mrs-energy-and-sustainability/article/lessons-from-technology-development-

for-energy-and-sustainability/2D40F35844FEFEC37FDC62499DDBD4DC/core-reader 72 https://www.cleanenergywire.org/factsheets/what-german-households-pay-power. At least by Alberta standards, 3500

kWh/year is a small amount of electricity. 73 https://www.thelocal.de/20170302/over-300000-poverty-hit-german-homes-have-power-cut-off-each-year 74 https://www.mirror.co.uk/money/million-families-face-choice-between-11442587 75 https://www.bbc.com/news/av/uk-42220561/pensioner-poverty-it-s-heat-or-eat

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energy advocates to tell these families they should pay significantly more for electricity based on the

exceedingly remote possibility that switching from fossil fuels—assuming it is even possible to do so in their

lifetimes—will have any measurable effect on Earth’s climate.

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Sometimes, even potential consumers speak for themselves:76

“I am tired of being lectured by people in rich countries who have never lived a day without electricity,” he said.

“Maybe they should just go home and turn off their fridge, geyser [electric hot water tank], their laptops and lights. Then live like that for a month and tell us, who have suffered for years, not to burn coal.”

Masiala agrees.

“Aid groups come to Africa and give out solar lamps the size of a pumpkin,” he said.

“But no one in London or Los Angeles would be willing to make do with that. Don’t tell me that China, Russia and the West should have electricity and black people in Mali or Mozambique should live in huts with light from a solar toy. We need power for cities, factories, mines and to run schools and hospitals.”

Sadly, governments have not done due diligence on renewables performance or cost-benefit assessments on

climate and energy policies. In fact, many governments have been complicit in spreading the “climate

catastrophe” message instead of examining any real evidence. Bjorn Lomborg, a former director of the Danish

government’s Environmental Assessment Institute, the director of the Copenhagen Consensus Center, a

visiting professor at the Copenhagen Business School, and one of the world’s most influential thinkers, has the

following to say:

• The climate impact of all Paris climate-treaty promises is miniscule. If we measure the impact of every

nation fulfilling every promise by 2030, the total temperature reduction will be 0.048 °C by 2100. Even

if we assume that these promises would be extended for another 70 years and that there is no CO₂

“leakage” to non-committed nations, the entirety of the Paris promises will reduce temperature rises

by just 0.17 °C by 2100.77 If all the promises in the treaty are kept, the resulting global hit to growth

will reach $1 trillion to $2 trillion a year by 2030. Those resources could have been used to make

everyone more resilient and prosperous.78

• Many of the elaborate and expensive actions now being considered to stop global warming will cost

hundreds of billions of dollars, are often based on emotional rather than strictly scientific assumptions

and may very well have little impact on the world's temperature for hundreds of years. We should first

focus our resources on more immediate concerns, such as fighting malaria and HIV/AIDS and assuring

and maintaining a safe, fresh water supply—which can be addressed at a fraction of the cost and save

millions of lives within our lifetime.79 Dr. Lomborg asks why the debate over climate change has stifled

rational dialogue and killed meaningful dissent.

• “Cutting CO₂ emissions is incredibly expensive. Green energy is not yet able to compete with fossil

fuels to meet most of humanity’s needs. Forcing industries and communities to shift — or plying them

with expensive subsidies — means everyone pays more for energy, hurting the poorest most. … What’s

needed is a vast increase in spending on green energy research and development. Instead of trying to

76 https://www.dailymaverick.co.za/article/2018-03-15-op-ed-clean-coal-is-the-way-to-power-africa-and-sa-academics-know-

how/ 77 https://www.lomborg.com/press-release-research-reveals-negligible-impact-of-paris-climate-promises 78 http://www.climatedepot.com/2018/10/11/bjorn-lomborg-dont-panic-over-un-climate-change-report/ 79 https://www.lomborg.com/cool-it

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force people to replace cheap, efficient fossil fuels with inefficient technology, we need to ensure that

green energy is the first choice for all.”80

• Cutting CO₂ emissions is incredibly expensive. Green energy is not yet able to compete with fossil fuels

to meet most of humanity’s needs. Forcing industries and communities to shift — or plying them with

expensive subsidies — means everyone pays more for energy, hurting the poorest most. What’s needed

is a vast increase in spending on green energy research and development instead of trying to force

people to replace cheap, efficient fossil fuels with inefficient technology

Dr. Lomborg cannot be dismissed by renewables advocates as a “climate-change denier;” he argues that

climate change is real and that it is man-made. Friends of Science agrees that Earth’s climate is affected by

humans and our industrial activities, but 4.5 billion years of geologic evidence shows that natural factors, driven

mostly by the sun and ocean cycles, are far more influential—and uncontrollable. Friends of Science completely

agrees with Dr. Lomborg that renewable energy is not in a position to displace fossil fuels and that attempts to

force it to do so will hurt the poor the hardest. We also agree with him that there are many more valuable and

achievable goals than trying to change the climate by reducing CO₂ emissions. Moreover, money spent on

humanity’s more immediate needs—including weather-resilient infrastructure—will produce benefits

regardless of the relative magnitude of human versus natural influences on climate. Society must not collapse

into energy poverty by pursuing a Utopian dream of 100% renewables based on faulty premises and a lack of

cost-benefit and performance analyses. (Professor Kelly has pointed out that rapid decarbonization of our

energy systems, as proposed by the UN climate panel (the IPCC), would lead to mass deaths.81) When—and

if—research into renewable energy systems can bring the true cost and reliability of renewable energy systems

into line with conventional forms of energy, there will be no need for billionaires and well-funded

environmental advocacy groups to demand changes to the world’s energy systems; those changes will occur

because they are economically rational and beneficial for humanity.

CO2 is not a Control Knob to Fine Tune Climate

The fear of global warming due to industrial emissions of CO₂ and other greenhouse gases (GHGs), as well as

the push to “save the planet,” formally began in 1992 with the United Nations Framework Convention on

Climate Change (UNFCCC) and its Article 2 Objective:

The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.82

80 http://www.climatedepot.com/2018/10/11/bjorn-lomborg-dont-panic-over-un-climate-change-report/ 81 https://www.rbkc.gov.uk/pdf/Prof%20Mike%20Kelly%20-%20FENand%20ER.pdf 82 https://unfccc.int/resource/docs/convkp/conveng.pdf

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While the atmosphere’s CO₂ concentration and perceived global warming increased in lock-step from the early

1970s to the mid-1990’s, there has been no statistically significant global warming since before the Kyoto

Accord was ratified in 1997, despite a dramatic rise in carbon dioxide concentration.

In 2003, scientists convened to review how other human influences, such as deforestation, land use, and water

diversion could affect the climate.83 In 2005, another large group of scientists convened to review whether the

radiative forcing theory (i.e., the theory that GHGs cause warming) was the best explanation of climate

change.84 They met because it was becoming clear that factors other than CO₂ and other GHGs affect climate.

However, in 2005 the ClimateWorks Foundation was formed to fund environmental organizations to promote

global cap and trade, renewables, and the “climate crisis.” In 2006, Al Gore’s “An Inconvenient Truth,” billed

as “by far the most terrifying film you will ever see,” was distributed worldwide. In 2007, Al Gore and the

Intergovernmental Panel on Climate Change (IPCC) won the Nobel Prize.

Who could argue with Al Gore and the IPCC? Well, Mother Nature could. After the release of the 2013 IPCC

AR5 report, wherein it was revealed that global warming had stopped for 15 years prior to the report’s release,

Dr. Judith Curry and many other scientists began challenging the “consensus” view on climate change.85 Based

on their analyses, CO₂ from human industrial activity does not appear to be the main driver of climate change

or global warming; rather, natural factors like ocean currents, solar cycles and geophysical changes (e.g.

tectonic movement, volcanoes, ocean cycles, etc.) appear to be more influential.

So, for many years, while being led to believe they were saving the planet through the implementation of wind

and solar to reduce CO₂ emissions, people have been paying billions for volatile, expensive power generation

under the guise of it being “clean and green.” Few investors or policymakers have done proper due diligence,

and now as a consequence, millions of consumers face heat-or-eat poverty. In return for these billions, there

has been no benefit for the environment. This must stop.

83 https://www.springer.com/us/book/9783642623738 84 https://www.nap.edu/catalog/11175/radiative-forcing-of-climate-change-expanding-the-concept-and-addressing 85 https://curryja.files.wordpress.com/2014/01/curry-senatetestimony-2014-final.pdf

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Conclusion

The reports by Deloitte and Climate Reality claim that wind and solar generation are now at or near price and

performance parity with conventional forms of generation. As this report has demonstrated, their assertions

on price parity are based on the levelized cost of energy (LCOE), a flawed metric that fails to include many of

the costs imposed on consumers by the use of intermittent resources. When consumers are forced by

government fiat to buy wind and solar energy ahead of energy from conventional sources, their costs rise. The

reason is simple: wind and solar generation suffer from extreme variability over periods of minutes to years.

While technology can solve or at least mitigate the shorter-term variability, longer-term variability requires a

level of energy storage that only fossil fuels can provide. The energy density of wind and solar is also extremely

low, so these renewables would require impossibly large facilities to meet the world’s energy needs. Wind and

solar energy systems in Canada and other places at similar latitudes and with similar climates are even more

technically challenging and more expensive. In the absence of any breakthrough technological advances,

attempting to also wean transportation, industrial heat production, and heating/cooling systems off fossil fuels

is a complete pipedream.

The “need” for renewable energy systems is ostensibly driven by the need to save the world from climate

change. As Friends of Science discusses in many other documents, the main direct and indirect driver of climate

change is the sun, and Earth’s vast oceans are the main internal responsive element of the climate system.

Carbon dioxide is not a control knob that can fine tune climate change. Efforts and resources are far better

directed to adapting our infrastructure to the weather events and climate cycles that are a natural and

inescapable fact of life on this planet. Further, bringing the enormous benefits of electricity to the billions who

do not yet have access to it will ultimately also “save the planet” by providing proper waste water treatment,

sanitation, safer and less life-threatening industrial occupations, and the pleasures of life and comfort that

people enjoy in the industrialized world.

As noted by Bjorn Lomborg, climate change is not a main concern for most people of the world.86 Most people

want security, affordable energy, viable industry and jobs that are only possible with reliable, affordable power.

Many of the world’s poor are now in danger of being denied access to affordable power because billionaires

with vested interests in renewables87,88,89 and climate activists90 are pushing banks and insurance companies

to stop financing or backstopping the development of these essential operations.91,92,93 Some church pension

funds are making money from the world’s poor through lend-lease programs for solar panels. While the panels

are undoubtedly useful in remote locations and there’s nothing wrong with making a profit, one might question

the ethics of a multi-billion-dollar church pension fund profiting from the poorest while proclaiming that they

86 https://www.theguardian.com/commentisfree/2006/jul/02/comment.internationalaidanddevelopment 87 https://www.bloomberg.org/press/releases/bloomberg-philanthropies-announces-partnership-powering-past-coal-alliance-

strengthen-global-efforts-phase-coal/ 88 https://www.washingtontimes.com/news/2015/jul/20/drew-johnson-sierra-club-has-become-front-group-do/ 89 https://onlinelibrary.wiley.com/doi/full/10.1002/wcc.524 90 https://content.sierraclub.org/coal/ 91 https://unfriendcoal.com/ 92 http://blog.friendsofscience.org/2017/10/21/saving-the-planet-on-the-backs-of-the-worlds-poor/ 93 https://www.reuters.com/article/us-worldbank-climate-coal/world-bank-to-limit-financing-of-coal-fired-plants-

idUSBRE96F19U20130716

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are achieving the UNPRI’s goals of being ethical, environmentally conscious, socially and sustainably concerned,

and dedicated to good governance.94

What is very clear is that the current path is unsustainable. We cannot continue to build wind and solar

generating facilities that provide unsustainably low energy returns on energy invested. We cannot continue

to turn a blind eye to the environmental degradation occurring in the developing world—where solar panels

and turbine components are manufactured, and materials are mined without adequate environment

regulation—so that we can feel good about saving the planet while not actually saving the planet. We must

find ways to recycle the existing wind turbine blades, solar panels, and footings that are piling up

worldwide.95,96,97 Industrialized nations cannot afford to pour exorbitant amounts of money into electricity

generation, leading to “industrial massacres.” 98 We cannot continue to pretend that wind and solar, which

have ludicrously low energy densities, can meet the energy needs of the world’s increasing population. We

cannot deny access to affordable electricity to the billions of people who have no such access today. The public

and policymakers must not remain in the dark on renewables. We must not be greenwashed any more.99 100

~~~~

94 https://www.pv-tech.org/news/church-pension-fund-provides-us17-miilion-for-off-grid-solar-loans-in-afric 95 https://climatechangedispatch.com/germanys-wind-energy-mess-as-subsidies-expire-thousands-of-turbines-to-close/ 96 https://asia.nikkei.com/Business/Technology/Japan-tries-to-chip-away-at-mountain-of-disused-solar-panels 97 http://insideenergy.org/2016/09/09/where-do-wind-turbines-go-to-die/ 98 "We face a systemic industrial massacre," said Antonio Tajani, the European industry commissioner. Mr Tajani warned that

Europe's quixotic dash for renewables was pushing electricity costs to untenable levels, leaving Europe struggling to compete as America's shale revolution cuts US natural gas prices by 80pc.

https://www.telegraph.co.uk/finance/financialcrisis/10295045/Brussels-fears-European-industrial-massacre-sparked-by-energy-costs.html

99 https://www.canada.ca/en/competition-bureau/news/2017/01/not-easy-being-green-businesses-must-back-up-their-

words.html 100 https://www.masterresource.org/climate-policy/who-was-ken-lay-the-senate-should-know-the-industry-father-of-us-side-

cap-and-trade/

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About

Friends of Science Society is an independent group of earth, atmospheric and solar scientists, engineers, and citizens who are celebrating its 16th year of offering climate science insights. After a thorough review of a broad spectrum of literature on climate change, Friends of Science Society has concluded that the sun is the main driver of climate change, not carbon dioxide (CO2). Friends of Science Society P.O. Box 23167, Mission P.O. Calgary, Alberta Canada T2S 3B1 Toll-free Telephone: 1-888-789-9597 Web: friendsofscience.org E-mail: contact(at)friendsofscience(dot)org Web: climatechange101.ca